• Canadian Dollar finds some room against the USD post-PCE print.
• Canada absent from the economic calendar until next Wednesday.
• Market focus to pivot toward upcoming Fed rate call.

The Canadian Dollar (CAD) found some space on Friday, bolstered by climbing Crude Oil markets and clawing back some of the week’s losses. The US Dollar Index (DXY) broadly fell early Friday ahead of US Personal Consumption Expenditure (PCE) figures, and the DXY saw a choppy recovery after the annualized Core PCE Price Index slid more than expected.

Canada is absent on the economic calendar until next Wednesday’s Canadian Gross Domestic Product (GDP) print, but effects are likely to be muted with broader markets focused on next week’s US Federal Reserve rate call and monetary policy statement.

Daily digest market movers: Canadian Dollar pares some of the week’s losses on Friday

• US Core PCE inflation printed at 2.9% YoY on Friday versus 3.0% forecast, 3.2% previously.
• Despite easing in Fed’s preferred inflation metric, US Personal Spending rose 0.7% MoM compared to the 0.4% forecast and 0.4% previous (revised up from 0.2%).
• US Pending Home Sales also rose 8.3% in December, well above the 1.5% forecast and the previous month’s -0.3% (revised down from 0.0%).
• US inflation continues to ease, but stubbornly robust consumption continues to weigh on rate cut hopes.
• Swap market bets of a Fed rate cut in March declined to 46% post-PCE release, falling back below 50%.
• According to the CME’s FedWatch Tool, markets are now pricing in May for the first rate cut.
• Next week’s Canadian MoM GDP for November expected to improve to 0.1% from 0.0%.
• Canada GDP to be engulfed by Fed rate call and Federal Open Market Committee (FOMC) press conference.
• Crude Oil markets saw new eight-week highs as supply concerns weigh on energy investors, West Texas Intermediate (WTI) US Crude Oil tests $77.00 per barrel on Friday